Maximus loses appeal in fight to keep child support contract

November 04, 2003|By Michael Dresser | Michael Dresser,SUN STAFF

Maximus Inc., the Virginia company that has run Baltimore's child support enforcement system for the past four years, has lost its appeal of the state's decision to award a new contract to provide those services to a rival firm.

In a decision released yesterday, the Maryland State Board of Contract Appeals ruled that the Department of Human Resources acted properly in awarding the contract to Policy Studies Inc. of Denver.

Losing the contract is a severe blow to Maximus because it locks the company out of what may be the nation's largest contract for privatized child support enforcement services for at least 4 1/4 years and possibly as long as 6 1/4 years. The contract, which covers Queen Anne's County and Baltimore, is worth an estimated $10 million to $15 million a year.

The department's decision was a tough blow for Maximus because the company had waged a long, bitterly fought battle to gain the General Assembly's approval this year of an extension of privatization of the two child support systems.

A call to a Maximus spokeswoman was not returned. The company can appeal to the courts or ask the Board of Public Works not to award the contract.

Bob Williams, president of PSI, said the company was "gratified" by the decision.

"We said all along that it was a very thorough and objective process on the part of the state," he said. Williams added that the company expects to be ready to take over after the current contract expires Dec. 31.

Maximus appealed to the board in May after DHR procurement officials recommended to the Board of Public Works that PSI be awarded the new contract. To allow time for the appeal, the public works board extended Maximus' contract six months.

After a nine-day hearing last month, the appeals board rejected Maximus' claim that the department's procurement process had been "arbitrary, capricious or unreasonable." The board also rejected Maximus' claims that the department's evaluation team was biased against the company because of allegations of misconduct made by Teresa Kaiser, the state's former chief of child support enforcement.